* European shares open lower
* Asian stock markets: tmsnrt.rs/2zpUAr4
* Tariffs to stay until there is 'Phase 2' agreement: Mnuchin
* U.S.-China 'Phase 1' trade deal to be signed later on Wednesday
* Bond yields inch lower; US earnings in focus (Updates throughout, changes byline, dateline)
By Sujata Rao
TOKYO, Jan 15 (Reuters) - World stocks eased off record highs on Wednesday and U.S. and German bond yields slipped as euphoria over a Sino-U.S. trade deal was depleted by U.S. Treasury Secretary Steven Mnuchin saying tariffs on Chinese goods would remain in place for now.
The 18-month long trade spat should enter a quieter phase as U.S. President Donald Trump and Chinese Vice Premier Liu He sign an initial agreement that would boost Chinese purchases of U.S. manufactured and agricultural goods, energy and services.
Dubbed the Phase 1 deal, it may soothe markets which have been on edge as the conflict between the world's two largest economies hit hundreds of billions of dollars in goods, uprooted supply chains and slowed economic growth.
But share prices have pulled back from recent highs, with Wall Street closing weaker on Tuesday, MSCI's index of Asian shares outside Japan retreating from 19-month peaks and Japan's benchmark Nikkei likewise falling 0.5%, off a four-week high.
Bourses in China, South Korea and Hong Kong lost between 0.5%-0.7% on the day .
The pan-European STOXX 600 index slipped 0.1%.
The retreat was triggered by Mnuchin's comments that U.S. tariffs on Chinese goods would stay until the completion of a second phase of a U.S.-China trade agreement. Their eventual removal hinged on Beijing's compliance with the Phase 1 accord, Bloomberg reported, citing sources.
The news did not entirely surprise markets, however, and many attributed the pullback to profit-taking off the recent rally than to any turn in underlying sentiment.
"The Phase One deal had pretty much been priced in so (Mnuchin's) comments took some steam out of the market last night and that's feeding through into today," said Justin Onuekwusi, a portfolio manager at Legal & General Investment Management.
The jittery mood gave a mild boost to safe-haven assets such as gold, with the precious metal ticking up 0.3% after two days of losses. The Japanese yen and high-grade bonds also firmed slightly, though the yen was only 0.1% higher versus the dollar and a whisker off 7-1/2-month lows of 110.22.
U.S. Treasury yields ticked down, with the benchmark 10-year note yield falling more than 2 basis points to 1.7930% , hurt also by Tuesday's data showing consumer prices undershooting expectations in December, which could allow interest rates to stay unchanged this year.
German 10-year yields also eased 2 bps, having earlier hit two-week highs around minus 0.169% but their direction may hinge on 2019 German growth numbers which showed the biggest euro zone economy grew at its slowest since 2013.
Markets are also weighing the potential impact of the U.S. government nearing publication of a rule to vastly expand its powers to block shipments of foreign-made goods to China's Huawei, as it seeks to squeeze the blacklisted telecoms firm.
"I think the Trump administration will continue to put pressure on China in this way or some other, even after signing a Phase 1 deal," Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance said.
Markets are also likely to focus more on company earnings from now -- Refinitiv analysis suggests S&P 500 companies had a dismal fourth quarter, with earnings-per-share falling 0.6% -- the second straight quarterly decline.
Big banks Goldman Sachs, Bank of America, BlackRock are among those reporting results later on Wednesday and expectations are high after JPMorgan posted record profits and Citi beat estimates, though Wells Fargo profits slumped.
"The market will see trade escalation taken off the table but it will start to focus on earnings. We saw huge multiple expansions in 2019 and that won't happen again until we see earnings coming through," Onuekwusi said.
On currency markets, the trade-reliant Australian dollar slipped 0.3% against the greenback while the euro was broadly flat .
The offshore yuan weakened slightly, a day after rising to its strongest level in six months of 6.865.
Investors were focused on the British pound which is down almost 2% this month versus the dollar as dismal economic numbers and policymaker comments have fanned expectations of an interest rate cut as soon as this month. A quarter-point cut is now fully priced by end-2020 tmsnrt.rs/2NmDt00<BOEWATCH > (Additional reporting by Tomo Uetake in Tokyo.)